Strategically Delusional

GATE Lyon Saint-Etienne, WP 1908, February, 2019

48 Pages Posted: 12 Mar 2019

See all articles by Alice Solda

Alice Solda

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Changxia Ke

Queensland University of Technology

Lionel Page

University of Technology Sydney (UTS)

Bill von Hippel

University of Queensland

Date Written: February 27, 2019

Abstract

We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. We design an experiment in which participants are incentivised either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants’ ability to gather information about their performance. Our results provide, the different empirical links of von Hippel and Trivers’ (2011) theory of strategic overconfidence. First, we find that participants are more likely to overestimate their performance when they anticipate that they will try to persuade others. Second, when offered the possibility to gather information about their performance, they bias their information search in a manner conducive to receiving more positive feedback. Third, the increase in confidence generated by this motivated reasoning has a positive effect on their persuasiveness.

Keywords: Overconfidence, motivated cognition, self-deception, persuasion, information sampling, experiment

JEL Classification: C91, D03, D83

Suggested Citation

Solda, Alice and Ke, Changxia and Page, Lionel and von Hippel, Bill, Strategically Delusional (February 27, 2019). GATE Lyon Saint-Etienne, WP 1908, February, 2019. Available at SSRN: https://ssrn.com/abstract=3343178 or http://dx.doi.org/10.2139/ssrn.3343178

Alice Solda (Contact Author)

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

Changxia Ke

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Lionel Page

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

Bill Von Hippel

University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

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